Coronavirus –FAQs for Food and Drink Businesses

We are really struggling. Can we get a grant or a loan from the Government?

SME Loans –Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loans are government backed, in as much as the Government guarantees to repay 80% of the loan, but they are offered through your usual bank/lender (there is a list of lenders operating the scheme which includes most banks). Lenders are free to set the interest rate and 100% of the loan will need to be repaid at the end of the term.

This is open to UK based businesses with an annual turnover of up to £45 million, the scheme provides access to loans, overdrafts, invoice finance and asset finance of up to £5 million, for up to 6 years.

Loans to Larger Companies

Under the Coronavirus Large Business Interruption Loan Scheme offers a similar arrangement on loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million, but further details are expected at the end of April.

Very small businesses – Grant funding of £10,000

Very small businesses (those who qualify for small business rates relief) can apply for this grant. Local Authorities will write to businesses with details of how to claim.

Retail, Hospitality and Leisure Grant Fund

This is a Local Authority administered grant programme allowing awards of:

£10,000 for properties with a rateable value of £0-£15,000; and

£15,000 for properties with a rateable value of £15,001-£51,000

Eligible businesses will be contacted by their local authority, though some local authorities have decided to operate an applications process.

We can’t pay our taxes – what should we do?

VAT deferral

If you have a VAT payment due between 20 March 2020 and 30 June 2020 you can defer payment. There is no need to notify HMRC, but do cancel your direct debit with the bank. Deferred VAT will still need to be paid by 31 March 2021.

HMRC Time to Pay

Food and drink businesses in difficulty may be able to agree a suspension of debt collection proceedings, or cancellation of penalties. Arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. HMRC has set up a dedicated helpline on 0800 0159 559.

Business Rates Holiday

Most food and drink businesses with a bricks and mortar outlet will benefit from this. It should apply automatically to your next council tax bill in April 2020, however, local authorities may have to reissue your bill (which they will do this as soon as possible). Estimate your revised business rate charge here.

We’d like to stay open as take-away only, what do we need to think about?

There are a number of issues to consider on this, including:

the government has relaxed planning laws to allow pubs and restaurants to serve takeaway food and drink without needing to apply for a change of use, but you will still need to consider relevant provisions and restrictions in your lease;

serving alcohol will still be subject to existing licensing laws;

you will need to do a risk assessment to understand how can you ensure the welfare of your employees (in compliance with guidelines on social distancing for example): find more help with reducing the risk to your employees here;

the food standards agency has some helpful advice, including relating to providing information on allergens as well as the practicalities of operating a delivery service (read here); and

consider how you will ensure customers are safe, for example: placing orders on the phone or by your website only; one-in-one-out on collections and staggered collection times; queue management, see Government advice here

See our recent blog for what some food and drink businesses are doing to keep going during the lockdown: here

We can only afford to pay some of our employees, not all of them. What are our options?

The Coronavirus Job Retention Scheme

Consider whether you can “furlough” some of your employees via this scheme. HMRC will reimburse 80% of workers’ wage costs, up to a cap of £2,500 per month, for employees that would otherwise have been laid off due to the effects of Coronavirus on the business. Read full details and information on your other options here.

We’re struggling with our rent, what happens if we can’t pay?

Protection from eviction.

The Government has introduced new temporary rules meaning commercial tenants cannot be evicted if they miss a payment up until 30 June (this date may be extended). Note though that this is not a rental holiday. Tenants are still be liable for the rent. Find more information and practical ideas for tenants here.

Can we claim anything on our insurance?

Whilst it seems that most business interruption policies won’t offer cover for losses relating to Covid -19, because these usually only cover losses that stem directly from damage to property, it is still worth checking with your broker on the exact wording of your policy as this does vary. Other policies that may however respond are travel insurance and event cancellation if your business has a relevant loss.

For further information in relation to food and drink businesses, please speak to Tom Bourne on 01892 506 099 or email Tom at Tom.Bourne@crippspg.co.uk.